CONNING THE CLIMATE Inside the carbon-trading shell game By Mark Schapiro

No, it’s not abstract, up there in the clouds!” exclaimed Talita Beck. “I can see it. I can measure it.” We were talking about carbon emissions; Beck is an emissions assessor, a profession that did not exist a decade ago. Several times a month, she leaves her offi ce in São Paulo, Brazil, in search of greenhouse gases—or, more precisely, to visit sites that have promised to emit less of them. Such commitments, whether made by malodorous pig farms, squalid city dumps, or rural sugarcane-processing mills, can be transformed into money by companies thousands of miles away, in Britain or Germany or Japan or any other country that has ratified the Kyoto Protocols.

Carbon trading is now the fastest-growing commodities market on earth. Since 2005, when major greenhouse-gas polluters among the Kyoto signatories were issued caps on their emissions and permitted to buy credits to meet those caps, there have been more than $300 billion worth of carbon transactions. Major financial institutions such as Goldman Sachs, Barclays, and Citibank now host carbon-trading desks in London; traders who once speculated on oil and gas are betting on the most insidious side effects of our fossil fuel–based economy.

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